British To Buy Darwin Molecular -- Chiroscience Offers Gates, Others $120 Million In Stock

In a trans-Atlantic linkup to foster genetic research, Bothell-based Darwin Molecular has agreed to be acquired by London-based Chiroscience Group for $120 million in stock.

One of privately owned Darwin's leading shareholders, Microsoft Chairman Bill Gates, applauded the deal.

"There is a strong synergy between these two companies which should accelerate the translation of Darwin's excellent science into therapeutic products," Gates said. "This merger is the right move for both companies."

Ronald Cape, Darwin co-founder, chairman and acting chief executive, will join Chiroscience's board along with David Galas, Darwin's chief scientific officer. Darwin's best-known researcher, Leroy Hood, will head the combined company's Scientific Advisory Board.

The two companies began discussing the merger this summer. They have not discussed a name change, Cape said. For the time being, Darwin's name and Bothell operations will remain the same.

British investors were thrilled by the deal. They sent Chiroscience shares up 7 percent, to their highest level in a month, before late profit-taking brought the price back to yesterday's level. Despite its youth, Chiroscience has a market value in London of about $450 million.

Chiroscience was founded in 1992 and has grown to 218 employees - 172 in its Cambridge research-and-development facility and 46 in a pilot program at Stevenage.

Darwin was founded in 1991, with laboratory operations starting in 1994. Of the company's 80 employees, 65 are in research. Gates and Microsoft co-founder Paul Allen each has a 13 percent stake in Darwin, stakes worth about $15.6 million in the Chiroscience deal. After the acquisition, Darwin shareholders will own 20 percent of Chiroscience, so Gates and Allen will each own about 2.5 percent.

Darwin's technologies include a gene-discovery program involved in the sequencing of large stretches of DNA, the human acid carrying genetic information. In the past year, Darwin identified genes for early-onset Alzheimer's disease and for Werner's syndrome, opening doors to the aging process. Darwin programs include research in psoriasis, rheumatoid arthritis, osteoporosis, and ovarian and prostate cancers.

Darwin's Hood, along with numerous Seattle-area and national researchers, was working last year to organize a "prostate consortium" - a centralized bank of genetic information on prostate cancer, which kills an estimated 40,000 men each year.

Former junk-bond king Michael Milken, diagnosed with the disease after serving two years in prison for securities fraud, last year committed $5 million a year for four years to Hood's University of Washington lab. The lab, along with Darwin Molecular, planned to map DNA, while other researchers would screen drugs and test for new therapies.

The companies said that Darwin would benefit from Chiroscience's expertise in bringing drug candidates through the approval process and that the deal would speed up current research and provide for collaborative work. Darwin has yet to reach the clinical stage for any of its therapies, while Chiroscience has a dozen drugs in its pipeline, Cape said. Chiroscience's focus is drugs to inhibit pain.

Chiroscience, in turn, will benefit from the creativity of frontier research at which Darwin excels, he said.

"It's as if two three-legged stools combined to make a very stable six-legged table," Cape said.